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Sir Robert Smith (West Aberdeenshire and Kincardine): Do the figures given by the Minister mean that 100,000 people will have to pay an extra £4,700 in tax?

Mr. Timms: As I have made clear, there are substantial opportunities for avoiding national insurance, and people are freely being advised to take those opportunities. Any responsible Government would act to close the loophole, and that is what we are doing. It should have been done years ago, but we are doing it tonight, and it is absolutely the right thing to do.

Mr. Fabricant rose--

Miss McIntosh rose--

Mr. Timms: I will give way to the hon. Member for Vale of York (Miss McIntosh), who has been trying to intervene for some time.

Miss McIntosh: I am grateful to the Minister for giving way, but he does not seem to appreciate the depth of feeling in the country against IR 35, which is reflected in the amendment.

Is it normal procedure for a Government to indicate a substantial change of policy through an Inland Revenue press release? Some of my constituents feel that they have been dealt with in an underhand manner, by stealth. A tax has been imposed on them, and the only notification that they had came in a press release.

Mr. Timms: The proposals published on 23 September have been received extremely well around the country. They have been widely welcomed, not least by the

3 Nov 1999 : Column 429

Chartered Institute of Taxation and the Professional Contractors Group. The debate has continued, but as I say, the changes have been widely welcomed.

I defy the hon. Lady, or any of her hon. Friends, to defend the arrangement left by the last Government whereby people can choose how much national insurance they pay, or whether they pay any at all. That is the central issue in the debate, and those who have spoken against the proposals have not addressed it. No one has sought to defend the present position, because it is indefensible. That is why we are making the changes that we are making tonight, and we are doing absolutely the right thing.

The hon. Member for Windsor (Mr. Trend) suggested that some other way of making the changes was available. I should be interested to know what proposals he has. The current position has existed for years; the last Government had 18 years in which to tackle it, and conspicuously failed to do so. That is why we need to take action now.

The right hon. Member for Fylde (Mr. Jack), a distinguished former Treasury Minister, raised a number of points. Let me tell him that all Governments, including his, want to tax genuine small businesses differently from employees. The employment status tests are the agreed and long-established way of making that distinction, and will continue to be used in that way for the purpose of this measure. That is absolutely right.

My hon. Friend the Member for North-West Norfolk (Dr. Turner)--who has explained to me that he has had to leave the Chamber--asked me about the distinction between self-employment and employment. The conventional distinction will be used to decide whether the new rules apply to service company workers. That means that the same criteria will be applied in the same way as they always have been in the past. There is no intention of applying the rules in any different way. They are well established and well understood; they are flexible; they take account of the whole pattern of a worker's engagement, so that a skilled worker who works for many different clients can be treated as one who is self-employed.

Today, the Inland Revenue sent out to representative bodies--the Professional Contractors Group and others, including those in the information technology industry--a draft guidance paper to clarify the way in which the criteria will apply to a typical situation involving a service company. That is the consultation. As always, we are determined to get the decisions right and we shall listen to the responses that we receive, but those criteria and guidelines will make the distinction as clear as it possibly can be, and will simplify the issues that service companies have to face.

It being Twelve o'clock, Mr. Deputy Speaker put the Question already proposed from the Chair, pursuant to Order this day.

Question put, That this House disagrees with the Lords in the said amendment:--

3 Nov 1999 : Column 430

The House divided: Ayes 345, Noes 203.

Division No. 287
[12 midnight


AYES


Abbott, Ms Diane
Adams, Mrs Irene (Paisley N)
Ainger, Nick
Alexander, Douglas
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Rt Hon Ms Hilary
Atherton, Ms Candy
Austin, John
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beard, Nigel
Beckett, Rt Hon Mrs Margaret
Bell, Stuart (Middlesbrough)
Benn, Hilary (Leeds C)
Benn, Rt Hon Tony (Chesterfield)
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Boateng, Paul
Borrow, David
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Butler, Mrs Christine
Byers, Rt Hon Stephen
Caborn, Rt Hon Richard
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Caplin, Ivor
Caton, Martin
Cawsey, Ian
Chapman, Ben (Wirral S)
Chaytor, David
Church, Ms Judith
Clapham, Michael
Clark, Rt Hon Dr David (S Shields)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Coleman, Iain
Colman, Tony
Cook, Rt Hon Robin (Livingston)
Cooper, Yvette
Corbett, Robin
Corbyn, Jeremy
Corston, Ms Jean
Cousins, Jim
Cranston, Ross
Crausby, David
Cryer, John (Hornchurch)
Cummings, John
Cunliffe, Lawrence
Cunningham, Rt Hon Dr Jack
(Copeland)
Cunningham, Jim (Cov'try S)
Curtis-Thomas, Mrs Claire
Dalyell, Tam
Darling, Rt Hon Alistair
Darvill, Keith
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Denham, John
Dismore, Andrew
Dobbin, Jim
Donohoe, Brian H
Doran, Frank
Dowd, Jim
Drew, David
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Etherington, Bill
Field, Rt Hon Frank
Fisher, Mark
Fitzsimons, Lorna
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Foulkes, George
Gapes, Mike
George, Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Godsiff, Roger
Goggins, Paul
Golding, Mrs Llin
Gordon, Mrs Eileen
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Grocott, Bruce
Grogan, John
Gunnell, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Hanson, David
Harman, Rt Hon Ms Harriet
Heal, Mrs Sylvia
Healey, John
Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hewitt, Ms Patricia
Hill, Keith
Hinchliffe, David
Hodge, Ms Margaret
Hoey, Kate
Hood, Jimmy
Hope, Phil
Hopkins, Kelvin
Howarth, Alan (Newport E)
Howarth, George (Knowsley N)
Howells, Dr Kim
Hoyle, Lindsay
Hughes, Ms Beverley (Stretford)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Ingram, Rt Hon Adam
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Rt Hon Barry (Alyn)
Jones, Mrs Fiona (Newark)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Jowell, Rt Hon Ms Tessa
Kaufman, Rt Hon Gerald
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Kelly, Ms Ruth
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kumar, Dr Ashok
Ladyman, Dr Stephen
Lawrence, Ms Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Liddell, Rt Hon Mrs Helen
Linton, Martin
Lloyd, Tony (Manchester C)
Lock, David
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McCartney, Rt Hon Ian
(Makerfield)
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
Mallaber, Judy
Marsden, Gordon (Blackpool S)
Marsden, Paul (Shrewsbury)
Marshall, David (Shettleston)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Martlew, Eric
Maxton, John
Meacher, Rt Hon Michael
Meale, Alan
Merron, Gillian
Michie, Bill (Shef'ld Heeley)
Milburn, Rt Hon Alan
Miller, Andrew
Moffatt, Laura
Moonie, Dr Lewis
Moran, Ms Margaret
Morgan, Ms Julie (Cardiff N)
Morgan, Rhodri (Cardiff W)
Morley, Elliot
Morris, Ms Estelle (B'ham Yardley)
Morris, Rt Hon John (Aberavon)
Mountford, Kali
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Murphy, Rt Hon Paul (Torfaen)
Naysmith, Dr Doug
Norris, Dan
O'Brien, Bill (Normanton)
O'Brien, Mike (N Warks)
O'Hara, Eddie
Olner, Bill
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Pendry, Tom
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pope, Greg
Pound, Stephen
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quinn, Lawrie
Radice, Rt Hon Giles
Rammell, Bill
Reed, Andrew (Loughborough)
Roche, Mrs Barbara
Rooker, Jeff
Rooney, Terry
Ross, Ernie (Dundee W)
Rowlands, Ted
Roy, Frank
Ruane, Chris
Ruddock, Joan
Ryan, Ms Joan
Sarwar, Mohammad
Savidge, Malcolm
Sawford, Phil
Sedgemore, Brian
Shaw, Jonathan
Sheldon, Rt Hon Robert
Shipley, Ms Debra
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, Rt Hon Chris (Islington S)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, Llew (Blaenau Gwent)
Snape, Peter
Soley, Clive
Spellar, John
Squire, Ms Rachel
Starkey, Dr Phyllis
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr Howard
Strang, Rt Hon Dr Gavin
Straw, Rt Hon Jack
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Gerry
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Taylor, Ms Dari (Stockton S)
Taylor, David (NW Leics)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trickett, Jon
Turner, Neil (Wigan)
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Tynan, Bill
Vaz, Keith
Walley, Ms Joan
Ward, Ms Claire
Watts, David
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Williams, Mrs Betty (Conwy)
Wills, Michael
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wise, Audrey
Wood, Mike
Woolas, Phil
Worthington, Tony
Wray, James
Wright, Anthony D (Gt Yarmouth)
Wyatt, Derek

Tellers for the Ayes:


Mr. Graham Allen and
Mr. Robert Ainsworth.


NOES


Ainsworth, Peter (E Surrey)
Allan, Richard
Amess, David
Ancram, Rt Hon Michael
Arbuthnot, Rt Hon James
Ashdown, Rt Hon Paddy
Atkinson, David (Bour'mth E)
Atkinson, Peter (Hexham)
Baker, Norman
Baldry, Tony
Ballard, Jackie
Beggs, Roy
Beith, Rt Hon A J
Bell, Martin (Tatton)
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Body, Sir Richard
Boswell, Tim
Bottomley, Peter (Worthing W)
Bottomley, Rt Hon Mrs Virginia
Brady, Graham
Brake, Tom
Brand, Dr Peter
Brazier, Julian
Breed, Colin
Brooke, Rt Hon Peter
Browning, Mrs Angela
Bruce, Ian (S Dorset)
Bruce, Malcolm (Gordon)
Burnett, John
Burns, Simon
Burstow, Paul
Butterfill, John
Cable, Dr Vincent
Campbell, Rt Hon Menzies
(NE Fife)
Canavan, Dennis
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chidgey, David
Chope, Christopher
Clappison, James
Clark, Dr Michael (Rayleigh)
Clarke, Rt Hon Kenneth
(Rushcliffe)
Clifton-Brown, Geoffrey
Collins, Tim
Colvin, Michael
Cormack, Sir Patrick
Cotter, Brian
Cran, James
Cunningham, Ms Roseanna
(Perth)
Curry, Rt Hon David
Davey, Edward (Kingston)
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice & Howden)
Day, Stephen
Duncan, Alan
Duncan Smith, Iain
Emery, Rt Hon Sir Peter
Evans, Nigel
Ewing, Mrs Margaret
Faber, David
Fabricant, Michael
Fallon, Michael
Fearn, Ronnie
Forth, Rt Hon Eric
Foster, Don (Bath)
Fowler, Rt Hon Sir Norman
Fraser, Christopher
Gale, Roger
Garnier, Edward
George, Andrew (St Ives)
Gibb, Nick
Gill, Christopher
Gorman, Mrs Teresa
Gorrie, Donald
Gray, James
Green, Damian
Greenway, John
Grieve, Dominic
Gummer, Rt Hon John
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Hancock, Mike
Harris, Dr Evan
Harvey, Nick
Hawkins, Nick
Heald, Oliver
Heath, David (Somerton & Frome)
Heath, Rt Hon Sir Edward
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Hughes, Simon (Southwark N)
Hunter, Andrew
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Jenkin, Bernard
Jones, Nigel (Cheltenham)
Keetch, Paul
Kennedy, Charles (Ross Skye)
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Kirkwood, Archy
Lait, Mrs Jacqui
Lansley, Andrew
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Livsey, Richard
Lloyd, Rt Hon Sir Peter (Fareham)
Llwyd, Elfyn
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
McAllion, John
MacGregor, Rt Hon John
McIntosh, Miss Anne
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Maples, John
Mates, Michael
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Michie, Mrs Ray (Argyll & Bute)
Moore, Michael
Moss, Malcolm
Nicholls, Patrick
Norman, Archie
Oaten, Mark
O'Brien, Stephen (Eddisbury)
Öpik, Lembit
Ottaway, Richard
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Prior, David
Randall, John
Redwood, Rt Hon John
Rendel, David
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Ross, William (E Lond'y)
Ruffley, David
Russell, Bob (Colchester)
St Aubyn, Nick
Salmond, Alex
Sanders, Adrian
Sayeed, Jonathan
Shephard, Rt Hon Mrs Gillian
Shepherd, Richard
Smith, Sir Robert (W Ab'd'ns)
Smyth, Rev Martin (Belfast S)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Streeter, Gary
Stunell, Andrew
Swayne, Desmond
Swinney, John
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, John M (Solihull)
Taylor, Matthew (Truro)
Taylor, Sir Teddy
Thompson, William
Tonge, Dr Jenny
Townend, John
Tredinnick, David
Trend, Michael
Tyler, Paul
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Wardle, Charles
Waterson, Nigel
Webb, Steve
Wells, Bowen
Welsh, Andrew
Whitney, Sir Raymond
Whittingdale, John
Wigley, Rt Hon Dafydd
Wilkinson, John
Willetts, David
Willis, Phil
Wilshire, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Woodward, Shaun
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Noes:


Mrs. Eleanor Laing and
Mr. Keith Simpson.

Question accordingly agreed to.

3 Nov 1999 : Column 433

Lords amendment disagreed to. Mr. Deputy Speaker then put the remaining Questions required to be put at that hour. Amendment proposed to the words so restored to the Bill: (a), in page 74, line 36, leave out "in any specified circumstances".--[Mr. Kevin Hughes.]

3 Nov 1999 : Column 434

Question put, That the amendment be made:--

The House divided: Ayes 344, Noes 166.


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